To launder the cash earned from the sale of cocaine, traffickers have lengthy transported their source of revenue the use of 500-euro expenses entrusted to “mules.” Higher surveillance and the loss of massive denominations have led cash laundering networks to pay drug traffickers in cryptocurrencies and ship the money thru extra non violent routes, similar to the ones resulting in Dubai (United Arab Emirates).
The cocaine marketplace exploded between 2014 and 2023. Manufacturing in Colombia larger greater than sevenfold and reached, in step with the United Countries Group on Medicine and Crime (UNODC), virtually 2,700 heaps.
In the back of the scenes, drug traffickers to find similarly illicit techniques to repay their providers, their small fingers, or to spend the proceeds in their prison industry. The answer used: cash laundering. It’s estimated that 25% of the amassed quantities will have to be washed.
Basically, 3 phases are vital in laundering: placement within the monetary device, stacking (or layering) with the intention to lose monitor of the foundation of the budget, and, in the end, integration, the place the cash now seems to be reliable. This typology does now not let us remember the fact that the whitening is every so often partial, this is, that we forestall on the first degree. Let’s imagine an instance.
Let’s take cocaine cash from the primary exporter of coca: Colombia. A part of it’s totally laundered at the spot, by means of re-injecting money into reliable companies – eating places, hair salons, and many others. – whilst the opposite phase is used to pay for items. To succeed in this, for a very long time it used to be sufficient to offer money – in banknotes – which used to be washed in Colombia.
Money smuggling
In Europe, accomplices running in banks alternate them into 500 euro expenses after which entrust them to mules. The latter take a airplane with sums from 200,000 to 500,000 euros. This huge money smuggling is a hyperlink within the drug trafficking chain that has benefited from the emergence of cryptocurrencies within the drug industry.
In an effort to totally perceive the usage of cryptocurrencies in drug cash laundering, it is important to provide an explanation for the modalities of mass money smuggling. The object by means of Peter Reute and Melvin Soudijn (the previous is a criminologist and the latter an intelligence officer within the Dutch police) made it imaginable to correctly measure the prices of this operation. They accessed the accounting paperwork of human traffickers in six circumstances adjudicated on details that passed off between 2003 and 2008. They transported a complete of 800 million euros between the Netherlands and Colombia.
The prices had been about 3% for converting small denominations into 500 euro notes, which used to be to be paid for the mule, rather less for his shuttle. Sturdy surveillance at Amsterdam’s Schiphol Airport made it vital to fly in different places in Europe. If we imagine the extra prices, simply transporting the budget to Colombia value between 10% and 15%, and even as much as 17% of the sums transferred.
Particularly:
Cocaine leaves Colombia.
It’s bought by means of intermediaries in Europe.
The cash amassed from this sale is become 500 euro banknotes, with a charge of three%.
Banknotes of 500 euros are entrusted to mules, with a charge of three%.
Mules go back and forth to Colombia with a three% charge.
The money arrives in Colombia to pay for the medication and is then laundered there, with further charges.
For the authors, anti-money laundering rules achieve considerably expanding the prices of smuggling, particularly transportation, however now not the marketing value, because the cocaine marketplace in France will increase once a year. In France, the superiority of spending has larger ninefold since 2000. To triumph over those rules, shops depend at the €500 invoice.
The tip of 500 euro banknotes
Restoration Would possibly 4, 2016: The Ecu Central Financial institution (ECB) comes to a decision to forestall issuing €500 notes. The selection of those banknotes in stream is rising from 614 million on the finish of 2015 to moderately not up to 220 million in mid-2025.
“It has been decided to permanently stop production of the €500 banknote and to remove it from the Europa series, taking into account concerns that this denomination could facilitate illicit activities,” the Ecu Central Financial institution underlines.
In the similar yr, a brand new monetary software burst onto the scene: Bitcoin.
Google Traits Bitcoin 2016-2019. Look of cryptocurrencies
From 2016, confronted with a scarcity of €500 notes, Bitcoin will lend a hand reconfigure the techniques money is traded.
As a substitute of an built-in channel the place money is going again to the drug supply to pay for supply, we see specialization. At the one hand, drug traffickers trade their cash for cryptocurrencies, which they use to pay for provides in Colombia. Alternatively, the cash laundering community collects the tickets and sends them by way of more uncomplicated routes, similar to the ones resulting in Dubai (United Arab Emirates).
How do we all know that? For instance, because of the operation of the British Nationwide Crime Company “Destabilize”. The clicking package describes a global cash laundering community managed by means of the Russians. They used an trade that failed its responsibility of care, Garantek, for cryptocurrency transactions and Dubai for money transactions.
The cash laundering community amassed money from drug traffickers and paid them in crypto tokens (together with USDT-Tether), for just a 3% charge. In comparison to 10% to fifteen% of what it value to move in Colombia ahead of the extinction of the five hundred euro be aware, it is a saving of 70% to 80%.
Crypto Asset Reporting Framework
Cryptocurrencies – first Bitcoin and now stablecoins like USDT-Tether – have allowed drug traffickers to save lots of their margin on sending money by means of opting for the most secure routes. It’s too early to understand whether or not the numerous build up within the transatlantic drug industry, showed by means of a contemporary investigation by means of the Monetary Occasions, is connected to this technical innovation.
Particularly, the brand new way follows this new course between drug traffickers and cash laundering networks:
Cocaine leaves Colombia.
It’s bought by means of intermediaries in Europe.
The cash raised from this sale is exchanged for USDT-Tether cryptocurrencies, with a three% charge.
USDT-Tether cryptocurrencies are despatched to Colombia to pay for medication.
For the cash laundering community, the money is entrusted to mules, which go back and forth to Dubai, for a charge of one%.
In Dubai, money is laundered with a charge of one%.
Regulation in opposition to cash laundering of crypto resources
We will be able to suppose that the applying of anti-money laundering regulations to provider suppliers associated with crypto-assets, in nations which can be signatories to the Crypto-asset Reporting Framework_, will complicate the sport of prison organizations… who will nonetheless have the ability to to find even the smallest loopholes and exploit them.
The discovery of cryptocurrencies has misplaced years within the combat in opposition to arranged crime, however a “coalition of the willing” like Switzerland, the Bahamas, Malta and France is in the end organizing itself.
In France, the combat in opposition to cash laundering has been reinforced by means of a regulation “aimed at extricating France from the trap of drug trafficking”, which used to be promulgated in June 2025. A specialised nationwide prosecutor’s place of job used to be established. Measures were installed position, together with administrative closures of faux companies (by means of prefects, now not over-exposed mayors), freezing the resources of drug traffickers or anti-mixing of crypto-assets.
However traffickers adapt to keep away from being stuck, as we can see in some other article.
